IRDA paves the way for smoother health claim settlement

The path to health insurance claims is now becoming easier. The insurance regulator IRDA has instructed insurance companies to prepare their systems for cashless claims settlement by July 31. Insurance companies will have to implement cashless claim settlement facility from August 1, 2024.

The regulator has instructed insurance companies to set up help desks in hospitals. If a policyholder seeks online approval for treatment in advance, digital approval should be given to them. The regulator has clearly stated that all insurance companies should strive for 100% cashless claim settlement. Reimbursement, meaning cash payment, should only be provided in special circumstances.

To expedite health insurance claim settlement, IRDA has taken several significant steps. In its recent circular, the regulator has stated that if a policyholder is in the hospital, a decision should be made immediately upon their cashless request. After receiving the request from the insurance company, a decision should be made within an hour.

If a policyholder is being discharged from the hospital, a decision on their claim should be made within three hours. The policyholder should not have to wait for discharge due to the claim. If there is a delay in claim settlement for more than three hours and the hospital charges extra fees, then the insurance company will have to pay for it. If the policyholder dies during treatment, the claim must be settled immediately. Insurance companies must ensure that the policyholder’s family does not have to wait in the hospital due to the claim.

Insurance companies will no longer be able to reject your claim arbitrarily. IRDA says that any claim related to treatment should be rejected only after review by the insurance company’s review committee. If any claim is partially or fully rejected, information must be provided based on insurance terms and facts. Documents necessary for the claim must be submitted to both the insurance company and the Third Party Administrator (TPA) during the claim process. The applicant will not need to submit documents for the claim.

In its circular, IRDA has also clarified the process of porting health insurance policies from one company to another. If a person ports their policy, existing and new insurance companies will ensure that there are no obstacles in transferring the details of the policy and claim-related history.

IRDA has said that the existing company will have to provide information requested by the new company within three days. The company that the policyholder has applied to for policy porting should make an immediate decision on this proposal. In no case should this process take more than 5 days. Moreover, benefits such as no-claim bonus, special waiting period, pre-existing disease (PED) waiting period, and moratorium period of the existing policy should be transferred to the new policy.

According to a survey conducted by the social media platform LocalCircles, in the last 3 years, 43% of health insurance policyholders faced all kinds of difficulties in claiming. Insurance companies either rejected claims in the name of pre-existing conditions or provided only partial claims. In many cases, policyholders had to wait in the hospital for 10 to 12 hours due to delays in claim approval. Hospitals collected extra charges during this period, which the policyholders had to bear.

Experts believe that IRDA’s new initiative will make it easier for health insurance policyholders to get cashless treatment. Along with this, the claims settlement process will speed up. In true terms, the real benefit of health insurance will now be realised.